All Roads Lead to the CMDB: ITSM and ITIL Implementations

by Tony Ioele

So what role does the Configuration Management Database (CMDB) and Service Catalog play in Information Technology Service Management (ITSM) and Information Technology Infrastructure Library (ITIL)?  Well everything.  It’s the heart, center or repository of information on services, systems, applications delivered to the business.  Most organizations don’t take advantage of what a service catalog has to offer.  Most CMDB implementations are standalone when in fact they need to be federated.  A Federated CMDB is an enterprise CMDB that accepts CMDB information from many sources. Got Software as a Service (SaaS); need federated CMDB.  

Let’s start by looking at the CMDB since we can use it as one of the building blocks for the service catalog. 

While the concept of a CMDB has been around for years in the forms of spreadsheets, Visio diagrams and simple databases, the CMDB of today is based on standards from the Distributed Management Task Force (DMTF).  The management and operation of a CMDB is defined in the ITIL standards. 

A CMDB has three primary components or views:

  • Technical
  • Ownership and Provider
  • Relationship 

Many organizations think they have a robust CMDB when in reality they do not.  There are many reasons for this including trying to “boil the ocean” and not having the right processes to maintain the CMDB.  Populating and maintaining a CMDB is a journey and not a destination.  Having a strategy and road-map to implementing, maintaining and assessing the health of your CMDB is critical to long term value. 

Start with the basics – server names, locations, ownership, applications installed, relationship to other assets in the infrastructure.  Make sure you tie problem and change management to the configuration management processes.  Once in place, expand to include desktops, laptops and mobile devices. 

As the CMDB is being implemented having a service strategy and road-map becomes paramount to an IT organization’s ability to be effective and add value to the business.  Too often the business can purchase SaaS and hosted solutions without the involvement of IT, causing support, inter-operability and service quality issues.  Ensuring your services road-map can include SaaS and other services not hosted or provided by the internal IT team means IT can be the service integrator of choice for the business. 

As with the CMDB, the service catalog should be implemented in stages and can start with the basics such as services for desktop, laptop, phone, e-mail, new hire, and termination.  From there, you can grow the service catalog to include provisioning of computer and storage, access requests, office moves and resource requests for projects.

Further Reading: WGroup recently published “Don’t Look Twice ITSM is Not ITIL”  Click here.

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Guiding Principles of Outcome Based Pricing in BPO

by WGroup

The worldwide economy shows sluggish growth numbers. Global corporations are posting modest earnings growth. What does this really mean to Business Process Outsourcing (BPO)?

  • Leadership must not only produce more with less, but they also have to ensure that they are clearing their internal ROI hurdle, as well as realizing their forecasted rates of return on capital projects.
  • To address this need from customers, BPO service providers have become even more creative and innovative with the financial engineering aspect of pricing. Questions are now being asked, more than ever before, about the feasibility of outcome based pricing.
  • Corporate management needs to more directly link investment dollars to the velocity of savings. Outcome based pricing, or contingency based pricing as commonly called, can be a pragmatic means of achieving these objectives.
  • Before heading “full bore” into a BPO agreement with outcome based pricing, there are a few basic principles that lend themselves to the full comprehension of the dynamics of this type of arrangement and its practicability for a BPO project.

Think of these guiding principles in the acrostic ACEApplicability, Calculability, Enforceability.

Applicability – How strongly interrelated is the outcome to the scope of services being performed? Will the outcome be materially impacted by the proficiency of service delivery? This is the most difficult assessment to make, specifically related to BPO. To date, the evolution of outcome based pricing hasn’t been commonly demonstrated in many BPO towers (HR, Legal, F&A); however momentum is building for outcome based pricing with respect to Strategic Sourcing (managed services) and Call Center solutions.

Calculability – Is the outcome of services being delivered definitively identifiable and quantifiable? Whether the outcome is savings or other business metrics, there should be clear definition with respect to the calculation. For example, as related to strategic sourcing managed services—-what exactly is “realized savings”? What are the measurement periods?

Enforceability – What contractual conditions are being leveraged to enhance the likelihood of the desired outcome? An important caution here is that this driver is not the “run of the mill” service levels agreement (SLA). The main idea is to not only impact price, but to also influence the viability of the contract life, through “push and pull” terms for both parties.

As the market continues to mature, anticipate more and more BPO deals to incorporate some element of outcome based pricing. To take full advantage of the benefits of BPO, business leaders must stay on top of evolving advancements in pricing and service delivery in order to take full advantage of the benefits BPO can bring to their business.

Further Reading: “First Things First in Demand Management.” Click here for a complimentary copy

 

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Don’t Look Twice – ITSM is not ITIL

by Tony Ioele

Information Technology Service Management (ITSM) is the framework for delivering technology within a business. While often interchanged with Information Technology Infrastructure Library (ITIL), the two are very different. 

ITSM is the organizational implementation of a management model used to design, implement and manage quality services for business customers. ITIL is a library of process standards outlined in 5 core publications that guide the delivery and support of IT services:

  • Service Strategy
  • Service Design
  • Service Transition
  • Service Operation
  • Continual Service Improvement 

ITIL standards are published by the UK Office of Government Commerce (OOGC) and provide a holistic view of delivering and managing services. ITIL and ITSM together make up the services ecosystem that create the capability to deliver and manage a portfolio of quality services. 

Think of ITSM as the organizational function, while ITIL is the process function. ITSM has to have alignment to:

  • IT Strategy – you must have an organization that supports and delivers on the IT Strategy
  • Demand Management – a very large part of ITSM is understanding what your customers/business users need and translate those requirements into cost effective and value driven services.
  • Governance – managing a portfolio of services, managing customer expectations and having the mechanisms to make effective and timely decisions.
  • Sourcing – staying abreast of where the industry is going and delivering the portfolio of services in the most cost effective and value driven manner, regardless of the source.
  • Vendor Management – managing the vendors to deliver the products and services in a manner that allows IT to meet their customer satisfaction.

ITSM is a fundamentally different way of delivering IT. Having Service Management capabilities is critical to your organization as it provides a basis for better management controls, improved operational efficiencies, value-based services and integrates well with service providers. 

WGroup believes the Service Management organizational model is an evolution. There are differences in organizational alignment, skills and culture which must be factored into the organizational design and implementation. Remember, ITIL is a process framework; a recipe if you will that needs to be adapted for each organization’s capabilities, skills and business requirements. By no means should someone “pull the ITIL reference manuals” and implement every facet of ITIL.

The benefits of IT Service Management Process Maturity provide the ability to deliver continuously improved, high quality IT services to all levels and types of customers – IT as a business! Furthermore, IT Service Management enhances the relationship between an IT organizations internal and external service providers while increasing the linkages across IT and improving service levels.

 Further Reading: WGroup recently published a Strategy Brief titled “First Things First with Demand Management.” Click here to download a complimentary copy.

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Key Organizational Considerations in New ERP Environments

by Steve Coper

A decision to move from homegrown and legacy ERP solutions to a packaged ERP solution (e.g., SAP, Oracle, etc.) requires changes to the on-going role and capability of the internal IT organization. It is WGroup’s perspective that the following factors should be considered when developing a new IT organizational model and capabilities:

  • A move to packaged software requires a change in organizational focus and capability. There will be a need to create Centers of Expertise or Excellence (COE) for managing the ERP solution going forward both from a business and an IT perspective.
  • During the ERP implementation, new process definition and process improvement is owned by the business and during implementation the business is usually responsible for the adoption of business processes.
  • Since the package ERP will become the new foundational system, a core team of Business Process owners should be retained post-implementation, to form a Business COE with responsibility for: 
    • Strategic Direction – ERP usage and enhancement 
    • Business Processes – Refinement and improvement
    • Business Integration and Interaction model
    • Business Ownership Enablement 
  • Similarly, an organization may create an internal IT capability to support the ERP solution architecture, continued development & integration capabilities – this forms the IT COE.
    • The IT COE works in concert with the business COE, the implementation team and the outsourced support provider to ensure that the on-going integrity of the ERP solution is maintained beyond the initial deployment and to plan future upgrades and changes 
    • The IT COE has an integral role, even if the support for new ERP environment is to be outsourced 
    • This may require an investment in resources, training and new skills
    • This also requires strong governance and disciplined execution 

A clear IT organizational strategy and the definition of the new IT organization structure post-implementation is a key step. It is recommended that an organization planning or executing a new ERP deployment meet with an experienced IT strategy firm to help craft a cohesive IT organizational strategy, operating model and implementation plan.

Futher Reading: Sourcing Considerations for New ERP Environments

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